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UBS Forecasts 11% Surge in Global Equities by 2026 Driven by AI

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  Published in Stocks and Investing on Friday, November 28th 2025 at 11:17 GMT by Seeking Alpha

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UBS Projects an 11 % Surge in Global Equity Markets by 2026, Citing AI‑Driven Growth

In a bold new research brief released on Seeking Alpha, UBS Global Wealth Management announced that it expects global equities to climb by roughly 11 % by the close of 2026. The Swiss bank attributes the upside primarily to the accelerating adoption of artificial intelligence (AI) across the world’s corporate and consumer sectors. UBS’s projection comes after a period of volatile markets, rising inflation, and geopolitical uncertainty, and it signals a shift in the bank’s long‑term view of how technology is reshaping corporate earnings.

How AI Is Expected to Boost Corporate Earnings

The core of UBS’s thesis is that AI will become a “productivity engine” that drives earnings growth at a pace that outstrips traditional sources of growth such as new product launches or geographical expansion. The bank cites a series of studies—from McKinsey, Boston Consulting Group, and a UBS‑commissioned survey of technology adoption—to estimate that AI can raise global GDP by as much as 10 % by 2030, with the most immediate benefits reflected in the earnings of large, technology‑savvy firms.

UBS’s forecast highlights several key mechanisms:

• Automation of Routine Work – AI is expected to automate a wide array of back‑office tasks, from data entry to compliance monitoring, freeing up capital that can be redirected toward higher‑margin initiatives.
• Enhanced Decision‑Making – Machine‑learning models that sift through millions of data points in real time are anticipated to improve product pricing, inventory management, and supply‑chain logistics, thereby improving gross margins.
• Customer‑Centric Innovation – Personalization engines powered by AI will help firms create bespoke products and services, creating new revenue streams in sectors such as finance, healthcare, and retail.
• Risk Management – AI‑driven risk‑analytics tools will reduce losses in credit, market, and operational risk, especially for banking and insurance.

When combined, these factors could push average earnings growth in AI‑heavy sectors upward by an estimated 0.6 % to 0.8 % annually over the next five years, which, according to UBS, translates into a cumulative 4‑5 % boost to the global equity market over the same period.

Macro‑Backdrop: Interest Rates, Inflation, and Geopolitical Tensions

While AI offers a powerful counterweight to macro‑headwinds, UBS also emphasizes the importance of traditional economic factors in shaping the outlook. The bank’s research team points to:

• Rising Interest Rates – Central banks in the United States, Europe, and Japan are gradually tightening policy to quell inflation. UBS models show that higher rates will dampen the valuation premiums that have supported equity markets in the last 12 months.
• Inflationary Pressure – Despite a decline in headline CPI in many developed markets, commodity price volatility remains a risk. UBS’s scenario analysis assumes a moderate 2.5 % inflation rate in the U.S. and 1.8 % in the Eurozone by 2026.
• Geopolitical Risks – Trade tensions between the U.S. and China, as well as the ongoing conflict in Eastern Europe, are identified as “high‑probability low‑impact” risks that could trigger short‑term market volatility.

“AI is a powerful growth engine, but it will not operate in a vacuum,” notes UBS’s Senior Equity Analyst, Dr. Miriam Lang. “We are calibrating our model to reflect both the upside from productivity gains and the downside from a tighter monetary environment.”

Sector Outlook: Who Will Reap the AI Benefit?

UBS’s sector‑level forecasts place technology and industrials as the biggest beneficiaries of AI, while consumer staples and utilities are expected to see more modest gains.

The bank underscores that “big‑tech” names such as Microsoft, Amazon, and Alphabet will likely capture a disproportionate share of the AI lift, but also cautions that mid‑cap firms that adopt AI early can achieve comparable growth rates.

Risk Factors and Caveats

UBS’s research notes a handful of risks that could materially alter the 11 % upside narrative:

• Regulatory Crackdown – The European Union’s forthcoming Digital Services Act and the U.S. Federal Trade Commission’s increased scrutiny over data privacy could impose compliance costs on AI‑dependent firms.
• AI‑Related Unemployment – Displacement of lower‑skill jobs might trigger social unrest, prompting governments to raise taxes or enforce protective legislation that could dampen consumer spending.
• Cybersecurity Threats – As firms become more data‑centric, the risk of cyber attacks will increase, potentially eroding investor confidence.
• Capital Allocation Lag – Even if AI proves profitable, the capital markets may take longer than expected to reprice companies, especially if investors remain risk‑averse.

Dr. Lang cautions that “while our models show a clear upside, the real world may introduce shocks that our baseline assumptions do not capture.” She adds that investors should keep a close eye on policy developments and emerging AI use cases.

The Bigger Picture: AI and the Future of Global Growth

Beyond the 11 % upside for equities, UBS’s report paints a broader picture of how AI could reshape the global economy. By 2030, AI is projected to lift global productivity by 3–4 % annually, potentially raising long‑run GDP growth from a 2 % to a 2.5 % pace. This shift, the bank argues, could offset the “demographic drag” in many developed economies and sustain consumer demand in emerging markets.

The report also links to a UBS whitepaper titled “Artificial Intelligence: The Next Frontier for Corporate Earnings”, which explores in depth the mechanisms through which AI can generate value. The paper includes case studies of firms that have already implemented AI for pricing optimization, supply‑chain planning, and fraud detection, demonstrating a consistent earnings uplift across multiple industries.

Conclusion

UBS’s 11 % equity upside forecast for 2026 reflects a convergence of several optimistic assumptions: a rapid acceleration of AI adoption, a continued macro‑environmental support for growth, and a belief that the productivity benefits will outweigh the risks of tighter monetary policy and regulatory uncertainty. While the bank’s projections are bullish, they also include a comprehensive set of risk factors that investors should monitor closely.

In a world where AI is increasingly viewed as a key driver of economic change, UBS’s research suggests that those companies that can effectively harness this technology will likely outperform the market. The next few years will be critical in determining whether AI’s promise translates into the projected 11 % lift in global equities—or if unforeseen challenges will temper the optimism.